Want to Kill the Annual Performance Review Step Up or Shut Up!

Every once in a while, you see a swarm of articles all saying that the annual performance review should die a horrible, painful death. You know the type of article: The theme is that you should throw out the performance review because it’s a twisted, dysfunctional tool of management designed to help "The Man" (or "The Woman," since bad management knows no gender) keep you and your employees down.

Let’s review the crimes usually cited by those who want to guillotine the performance review:

1. Johnny never hears about his performance until it’s time for the review. It’s the hit-and-run of performance management. Johnny stinks. Everyone knows it, but you wait one year to tell him. Johnny ends up being surprised or fakes being surprised. Nice work, Jack Welch.

2. In the performance review, all Jane’s manager does is focus on what she’s doing wrong. The need to provide an average or below-average review leads to a "hammer" session. If you do four things right and one item needs improvement, then I’ve got to hammer you on the bad item to justify my rating and the low pay increase I want to give you. That can’t end well.

3. Everybody’s getting the same raise this year, so the process of giving Jane an annual review is a charade. Perhaps the T-shirt for Jane should read, "I got the highest rating in my department, and I still got the same crappy raise Johnny did." The back of the shirt says, "BTW, Johnny steals office supplies from the company and I’ve reported him for drinking on the job."

4. All the power in the traditional performance review system is in the hands of the boss, with none going to Johnny or Jane. Of course we have the power. We talk, you listen. We write it, you read it. If you want two-way communication, ask your therapist or marriage counselor.

I could go on. But let’s just say that those who call for the end of the traditional performance review compare it to handcuffing workers to the production-line machinery for "voluntary overtime." (And if your response to that sentence was "What’s wrong with that?" you might be snarky enough for a gig at Fistful of Talent.) The anti-performance review crowd also likes to imply a little intellectual blackmail: If you don’t agree with us in our call for the end of the traditional performance review, then you must be part of the problem.

Of course, it’s never that simple. Organizational life makes it much more complex.

Nevertheless, the screeds go on. The latest in the line of these high-profile performance review rants comes from Samuel Culbert of UCLA’s Anderson School of Management, writing in the august Wall Street Journal.Click here to see the seven reasons Culbert cites in his call to eliminate the traditional performance review. It's a good list, but like all anti-performance review rants, it misses two very important points:

1. You can only throw out the annual review if your managers can do one very important thing—coach talent on a daily basis.

2. No coaching skills? Then the first time the employee gets feedback on adjustments/improvements to make IS the annual review, which brings with it all the problems that Culbert outlines.

Clearly, then, the problem isn’t the institution of the annual performance review. The problem is that most managers don’t know how to effectively coach employees on a daily basis, and most organizations make no attempt to make coaching skills part of the manager’s DNA.

That’s why the performance review exists in the first place. It’s also why you can’t remove it, no matter how many consultants rage against the machine.

I think performance management that places a premium on coaching skills is key to maximizing employee engagement. Where are you going to be more engaged as an employee? In a relationship with a manager who positively affirms what you are doing well and brainstorms with you how you can maximize yourself and your career, or with a manager who only engages you on your performance on an annual basis? I’ve had both in my career, and I think the answer is pretty clear.

All the experts who make the easy claim that we should kill the performance review fail to acknowledge the fundamental problem: Corporate America has no clue of how to impart coaching skills to either new or experienced managers. Most managers aren't good coaches. They avoid the conversations (both positive and corrective in nature) that they should have daily. Too much confrontation, too messy, they’ve got other stuff to do, blah, blah, blah.

But there’s hope. If you really want to kill the annual performance review in your organization, start by making daily performance coaching a part of your culture. Here are some coaching skill areas that you must bring into your organization in order to have a shot at changing your performance management system:

1. Your managers need to be positive. The first time the employee hears something, it shouldn’t be negative. The best practice is a 3:1 positive to negative feedback ratio. Show them some love, and the coaching door for the bad stuff opens.

2. Your managers need to confront performance issues the same day they identify them. It’s called a willingness to confront and a sense of urgency to make daily coaching a priority, and it’s one of the toughest things to embed in your culture. Good luck, because human nature avoids confrontation.

3. Your managers need to keep it simple when they DO attempt to coach. Coaching isn’t about drawing up a formal document. It’s about simply stating what you’ve observed, and then quickly arriving at point No. 4 on this list.

4. Your managers need to SHUT UP after they’ve identified an issue to an employee. Perhaps the most critical skill of any effective organizational coach is this one. Once your managers have identified the issue in question, they have to stop talking and let the employee react. It’s the clearest path to getting the employee engaged in fixing the issue.

5. Your managers need to allow the employee to come up with the majority of action items related to how they’re going to fix the issue in question. The employee is more likely to fix the performance issue if they’re involved in the brainstorming on what needs to be done to fix the problem. With that in mind, you’ve got to stop giving them a list of what to do to improve, and start making the process interactive.

It's easy to call for an end to the performance review. If you’re one of the people doing that, however, make sure you put your money and time where your mouth is, and be involved in providing the training and CONTINUOUS feedback to managers regarding the development of their coaching skills. It’s the only way you can undo the problems that come with the annual performance review.

What's that? You don't have time? You’re a consultant who is simply willing to charge a fee to assist but otherwise unwilling to help? Guess what, Tony Robbins? You can't kill the performance review, because you’re part of the problem, not part of the solution. Call me when you're ready to do something to improve the situation.

While I’m on a rant, I’ll throw some props to Jessica Lee at Fistful of Talent and agree with her defense of the annual review. I’d also like to get some opinions from people who are actually responsible for the performance review process inside corporate America. Care to share? Post your comments at the end of this article.